Swiss banking giant UBS has registered 32% rise in third quarter net profit even as it set aside CHF1.8bn ($1.9bn) for legal provisions.
UBS said the bulk of the provision was for litigation and regulatory issues investment banking arm.
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The group posted net profit of CHF762m for third-quarter, compared with CHF577m in the same period last year.
For the quarter ended 30 September 2014, the group’s operating income rose to CHF6.88bn from CHF6.26 billion.
The group also updated its guidance on restructuring costs for the next three years. It expects costs of around CHF700m in 2014, CHF1.4bn in 2015, CHF900m in 2016 and CHF400m in 2017.
The group said there will also be an extra CHF100m charge each year "to achieve our planned cost reductions."
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By GlobalDataThe wealth management unit’s adjusted profit before tax increased to CHF767m, the highest quarterly adjusted profit before tax since the second quarter of 2009. Net new money remained strong at CHF9.8bn.
Wealth Management Americas delivered another strong performance with an adjusted profit before tax of $267m, a rise of $21m. Net new money improved significantly to $4.9bn from negative $2.5bn in the prior quarter, reflecting net inflows from financial advisors employed with UBS for more than one year compared with net outflows in the prior quarter.
Global Asset Management division recorded an adjusted profit before tax of CHF151m, CHF44m higher than in the prior quarter, which included charges for provisions for litigation, regulatory and similar matters.
Net management fees increased, mainly in traditional investments and also in global real estate. Performance fees declined, primarily in the O’Connor and A&Q business line, partly offset by increases in traditional investments and global real estate, the bank said in a statement.
The chief executive of UBS, Sergio Ermotti, said he was pleased with the quarterly performance and that the bank was facing its regulatory issues head on.
UBS has been focused on cutting costs in its investment bank and building its wealth-management business.
"Three years since introducing our strategy, the business is far stronger, its earnings power is much greater, and our absolute and relative capital position speaks for itself," Ermotti added.
